U.S. President Joe Biden demanded oil refining companies explain why they are not putting more gasoline on the market, sharply escalating his rhetoric against industry as he faces pressure over rising prices, said Hydrocarbonprocessing.
Biden wrote to executives from Marathon Petroleum Corp , Valero Energy Corp and Exxon Mobil Corp and complained they had cut back on oil refining to pad their profits, according to a copy of the letter seen by Reuters. The letter is also being sent to Phillips 66, Chevron Corp, BP and Shell, a White House official, who declined to be identified, told Reuters.
"At a time of war, refinery profit margins well above normal being passed directly onto American families are not acceptable," Biden wrote, adding the lack of refining was driving gas prices up faster than oil prices. U.S. energy companies are enjoying bumper profits as the Russian invasion of Ukraine has added to a supply squeeze which has driven crude oil prices above $100 a barrel, and as fuel demand has remained robust, despite record high gasoline prices.
U.S. refining capacity peaked in April 2020 at just under 19 MMbpd, as refiners shut several unprofitable facilities during the coronavirus pandemic. As of March, refining capacity was 17.9 MMbpd, but there have been other closures announced since. U.S. refiners are running at near-peak levels to process fuel - currently at 94% of capacity - and say there is little they can do to satisfy Biden's demands.
“Our refineries are running full out,” Bruce Niemeyer, corporate vice president of strategy and sustainability at Chevron, told Reuters on the sidelines of a New York energy transition conference on Tuesday, before Biden’s letter was made public.
Biden said the industry's lack of action is blunting the administration's attempts to offset the impact of oil-rich Russia's invasion of Ukraine, such as releases from the nation's oil reserves and adding more cheaper ethanol to gasoline. On Friday, the president accused the U.S. oil industry, and Exxon Mobil Corp XOM.N in particular, of capitalizing on a supply shortage to fatten profits after a report showed.
As per MRC, The White House is considering waiving U.S. gasoline environmental rules aimed at reducing summertime smog, hoping the waiver will combat rising pump prices, according to three sources involved in the discussions. The Biden administration is considering waiving U.S. gasoline environmental rules aimed at reducing summertime smog, hoping the waiver will combat rising pump prices, according to three sources involved in the discussions.
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